The strategic link to tenders
One of the biggest drivers of compliance in South Africa, and in particular black economic empowerment (BBBEE), is access to government spending. It’s a client that very few businesses can ignore, with total consolidated government spending projected to increase nominally to R2,6 trillion by 2026/27.
Compliance – regulatory and otherwise, including BBBEE - is indicative of the organisation being a responsible, trustworthy and committed to the country’s transformation agenda.
The BBBEE agenda includes:
Points earned across these elements determine your BBBEE level (from Level 1 to Level 8):
Figure 1
But what benefits does BBBEE compliance mean for South African businesses in securing government business?
1. Competitive edge in procurement and tenders
Many state-owned and aligned organisations will give preference to those who score well on broad-based black empowerment. It may rule out some low-scoring organisations.
2. Access to financial and tax incentives
Compliant businesses will have access to grants, tax deductions, and incentives.
3. Enhanced reputation and stakeholder trust
BBBEE compliance demonstrates an organisation’s commitment to transformation and social justice with its stakeholders.
4. Attraction and retention of talent
A proactive, transformative stance toward its people will attract and retain the best talent.
5. Contribution to national transformation
Each scorecard element contributes to a more equitable economy, fulfilling the moral and legislative obligations to shape a positive future.
Lastly, given the importance of compliance to businesses, what can organisations do to build commitment to compliance?
Figure 2
